East LA’s CFA Leaves More Questions Than It Answers

Only a few residents participated in recent meetings held to review study data.

By Gloria Angelina Castillo, EGP Staff Writer

About 100 East Los Angeles residents attended meetings last weekend sponsored by the Los Angeles Local Agency Formation Commission (LAFCO) intended to explain the results of a recently released Comprehensive Fiscal Analysis (CFA) on the financial viability of unincorporated East Los Angeles becoming a city.

While the seemingly outnumbered opponents to cityhood questioned the area’s financial feasibility, proponents focused their questions on the study’s accuracy and completeness.

Some residents complained copies of the CFA—which explains the revenues and costs of the proposed City of East Los Angeles—were not available at local public libraries; others expressed dissatisfaction with the analysis itself.

“How much were you paid to do this study? $130,000? Well, I’m very disappointed in your presentation. The public has the right to know … you should show a break down of the fees …what we’re actually paying for,” said Sophia Quiñonez during both the July 29 and July 30 meetings.

Across the board, residents seemed most concerned about the impact incorporation would have on public safety and taxes.

“…[If Sheriffs services are reduced] how can you not foresee increased crime here? … That would doom us to be targets,” said business owner Yolanda Duarte.

Duarte compared East Los Angeles to Compton, saying crime went up when budget cuts reduced policing.

The East LA CFA indicates that 118 patrol officers were assigned to the East Los Angeles Sheriffs Station, a number the department is proposing to increase to 138. However, the study’s author, Economic & Planning Systems Inc., calculates the city would need 93 patrol officers —a number “more similar to contract services provided to other communities,” which would reduce costs.

About 45 people attended the meeting held on July 29, another 55 attended the July 30 meeting. Low attendance provided ample time for comments, speakers were not timed. EGP photo by Gloria Angelina Castillo

East LA resident Al Rivera, however, questions the accuracy of both the Sheriff’s and the study’s numbers. He said the Sheriffs website states 56 deputies patrol East LA, and added he’s been told by a “source” that there are really only 48 deputies assigned to patrols.

LASD Contract Law Enforcement Lt. Michael Irving told EGP that 56 patrol officers is correct, and includes officers on personal leave, etc. The 152 other sworn officers currently at the station are assigned to other duties, including 74 assigned to contract cities that include Commerce, Maywood and Cudahy, according to Irving.

East Los Angeles Resident Association President Benjamin Cardenas on Tuesday told EGP they do not want to speculate on the estimates or comment on whether the LASD numbers are inflated. EPS’ estimate for Sheriffs services are “in line with other comparable cities with similar demographics, crime stats and service calls,” he said. ELARA is backing the incorporation effort, and paid for the CFA study.

LAFCO and EPS will follow up and ask the County CEO and LASD to clear up the discrepancy and verify the numbers to be included in the final CFA, LAFCO spokesperson Paul Novak told EGP.

On Saturday, EPS’ Richard Berkson said the Sheriff’s proposal was not audited. He said starting a police department is expensive and noted that many cities are looking to contract with the LASD in order to save money. Still, proponents, like Arnuldo Delgado, said they wished he would “get more than one bid” to compare costs.

Arnulfo Delgado and other ELARA members also asked about reducing the salary estimates for city staff. EGP Photo by Gloria Angelina Castillo

Residents also questioned the amount and allocation of property taxes, noting that the CFA’s numbers are much lower than those reported in an earlier study. Berkson explained property tax amounts in the study are a calculation, and said he could not vouch for the information in the Initial Fiscal Analysis produced by a different group in 2007.

That study, conducted by Burr Consulting before the housing bubble burst, estimated the area’s property taxes at $30 million; the CFA released two weeks ago put the number at $14 million.

According to DataQuick, a San Diego-based company that provides monthly statistical data on home sales, the median price paid for a single-family home in unincorporated East LA between January and June 2011 was nearly half of what they were for the same period in 2006. Home prices in the 90022 zip code were down 49.8 percent while homes in the 90063 zip code dropped 57.9 percent when compared to 2006, DataQuick’s Andrew LePage told EGP in an email. It is unclear from the study, however, if the assessed values in those areas have also been reduced.

Long-time cityhood supporter Miguel Haro questioned why EPS had assumed the East LA economy would not grow. Berkson responded saying there are not major development plans proposed and noted the area is land-locked.

Others asked how much the Utility User Tax (UUT) would increase if the tax went from 4.5 percent to 10 percent as suggested in the CFA.

Seventy-three-year-old Frank Ortiz, said he was willing to pay more taxes in exchange for accountability. No one gives you free services unless you go on welfare, he said.

CJ Salgado, a resident and blogger, asked that a market analysis be conducted and include the informal economy, which he said represents a significant amount of un-captured revenue.

While the Final CFA will address submitted questions and comments, it won’t include an analysis of the informal economy. “It is important to note that the informal economy generates no true ‘revenue’ for local government: no sales taxes, property taxes, nor fees (i.e., permit fees, business license fees). It is unclear, therefore, what benefit studying the ‘impact’ of the local economy would have relative to the economic viability of a proposed City of East Los Angeles,” Novak told EGP.

Eddie Torres told LAFCO and EPS representatives that cityhood would be a detriment to the area. Other opponents of the cityhood effort said East LA could become like corrupt "like the City of Bell." EGP Photo by Gloria Angelina Castillo

Staunch cityhood opponent and East Los Angeles Chamber of Commerce member Eddie Torres grilled LAFCO and EPS at Saturday’s meeting. He said the CFA shows the county is currently “subsidizing” services for East LA, and wanted to know if that means the area would “go broke faster” if it becomes a city.

Responding to another question, Torres was told cityhood would fail if it were placed on a ballot along with tax measures not approved by voters.

On numerous occasions, Novak and Berkson said the CFA offers options to address the area’s deficit, adding that residents can submit other options to include in the final CFA through Aug. 29.

City Terrace resident Jesse Luna said becoming a city would just add “another layer of bureaucracy.” Berkson responded that becoming a city gives an area more control of how they use revenues. He said management would not be duplicated but rather shifted from the Board of Supervisors to local control.

“This is a bad time to consider cityhood,” Luna said.

Some people want the deadline to comment on the report extended because they claim LAFCO failed to make hard copies available in a timely manner. Novack said there are no plans extend the deadline. He said LAFCO sent copies to the four East LA libraries via FedEx overnight delivery on July 14, adding prior to the meetings no one had informed LAFCO that the copies were not available. Supervisor Molina’s staff has been asked to look into the issue, he said.

“We distributed over 100 copies of the CFA Executive Summary at the two community meetings, as well as more than 100 copies of the hard copies of the EPS PowerPoint slide presentation (it appears everybody who attended left with a copy of both). We distributed 6 copies of the full Public Review CFA as well (at the community meetings), and took names/addresses of individuals who wanted hard copies, and LAFCO staff will mail those out this week. There is a special ELA section on LAFCO’s web-site with full copies of all relevant documents,” he said.

The CFA was prepared by “a qualified, capable, and competent consulting firm (EPS) under the leadership of Richard Berkson, an experienced manager who has prepared several other CFA’s over the past decade,” Novak said responding to concerns that the CFA was lacking important data.

The public comment period is open until Aug. 29. Residents can submit comments to LAFCO via U.S. mail, fax, or e-mail (pnovak@lalafco.org). LAFCO prefers written comments because the records will be utilized in the Public Hearing CFA and/or the Executive Officer’s Report, Novak said. Residents who want to submit comments through other means, can call LAFCO at (818) 254-2454.

The final CFA is scheduled to be made public no later than Thursday, Sept. 8, about a week in advance of the LAFCO public hearing on Sept. 14.

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